Question

Farm Supply's rural mailboxes has fixed costs of $192,827.00. The selling price of a mailbox is $39.99. The average variable cost of producing a mailbox is $25.43. What is the break-even point in units?

Answer 1

To get the break-even point, you have to divide the fixed cost by the selling price of a mailbox less the variable cost in making a mailbox. In this case, we will have to divide $192,827.00 by $39.99 less $25.43. So, the break-even point will be 13244 units.